Motoya Nakamura/The Oregonian Jim Bernau, a former small-business lobbyist, used his political savvy to pull off the nation’s first self-underwritten public common stock offering as a way to start Willamette Valley Vineyards. The Turner-based operation is Oregon’s third-largest winery. TURNER -- The 17 lengths of garden hose Jim Bernau hauled up and down steep slopes overlooking Interstate 5 in 1983 provided all the clues anyone needed that he was taking a very different approach to making wine in Oregon.

In the quarter-century since, Bernau and his Willamette Valley Vineyards winery have racked up a dizzying number of firsts, from pulling off the nation's first self-underwritten public common stock offering to posting, amid the worst economic downturn in memory, industry-leading sales and distribution gains.

All while coping with enough obstacles to sink any 10 businesses.

During that span, Oregon's wine industry has grown from a loosely affiliated group of maybe two dozen vintners to nearly 400 commercial wineries generating nearly $1.5billion in annual revenue.

Bernau, a former small-business lobbyist who paid his way through college working summers at a Douglas County sawmill, also has had a hand in virtually every significant milestone along the way.

"Jim has become a unique part of the Oregon wine industry," said David Adelsheim, one of only a few first-generation Oregon winemakers still active in the business. "He came up with the blueprints that the rest of us are still building on."

Adelsheim credited Bernau, for instance, with the legislative know-how to combine two "dysfunctional" boards into the Oregon Wine Board, which now oversees industry research, education, promotion and advocacy.

"Jim's a revolutionary," said Jack Irvine, an industry veteran whose accounting firm represents more than 100 Oregon wineries. "He's done things no one else has even dreamed of."

In the early days, as now, Bernau had his detractors.

Willamette Valley Vineyards

Where: Turner, just south of Salem
Founder: Jim Bernau
Structure: Only publicly traded winery in Oregon
2009 sales: $16 million
Employees: 120 full time
Distinction: No.1 Hottest Small Brand of 2007 by Wine Business Monthly
Production: About 120,000 cases in 2009, most of it pinot noir
Size: Third-largest Oregon winery by case sales

His idea of a public stock offering to build a winery, for instance, rubbed some in the fledgling industry the wrong way. Respectable wineries, they grumbled, relied on private financing.

Growing up along the Umpqua River in Glide, Bernau remembers his father, a lawyer, bringing home bottles of wine he earned in trade from Richard Sommer, whose Hillcrest Vineyards was Oregon's first post-prohibition winery.

Soon, Bernau and his brother were making their own wine using concentrated juice from his mother's freezer. The passion grew from there.

At the University of Oregon, where he was elected student body president, Bernau organized a student-run grocery cooperative. Eventually, it broke down, but not before teaching him the logic in consumers organizing themselves.

The experience paved the way for what would become Oregon's first and only publicly held winery.

Motoya Nakamura/The Oregonian In 2007, Willamette Valley Vineyards became the first winery in the world to use sustainable cork stoppers certified to Forest Stewardship Council (FSC) standards. Winery owner Jim Bernau estimates the program costs $250,000 a year more than if he used aluminum screwcaps but says using sustainable cork reflects the values of the winery’s 4,500 shareholders. In 1981, Bernau, then working as a Salem-based lobbyist for the National Federal of Independent Businesses, got serious. Although living in an apartment complex that didn't even provide a parking space, he took advantage of an expiring tax credit and bought a tractor.

"That's how nutty I was," he said. "I was possessed."

The Oregon wine industry, still in its infancy, hadn't yet decided which areas were prime to plant. Bernau found a steeply sloped parcel south of Salem that, because of a sour economy, was in foreclosure.

Neighbors told him that a plum orchard once graced the hillside. Plums at the bottom tended to be plump, growing ever smaller as the elevation rose. They called the tiny, flavor-packed fruit at the top of the hill "whiskey prunes."

"My heart was pounding when I heard that," he said. "The place I was looking for needed to grow small clusters with berries of intense flavor. This was it."

Bernau, lacking the money for an irrigation system, saw that Fred Meyer had a sale on 75-foot lengths of garden hose. He bought 17 and spent an entire summer hauling them up and down the hill, watering each newly planted vine by hand.

"The neighbors thought I was crazy," he said, laughing. "I don't blame them."

A world-class winery

Bernau pulled off the public offering, persuading 873 founding shareholders to pay $1.70 a share for a minimum of $1,020 in stock. With just more than $5 million in capitalization, the winery opened in 1989.

A few years later, he used the same financial model to start Willamette Valley Brewing Co. He now blames himself for the rapid expansion that led to a spectacular collapse in 1997.

Along the way, he overcame two heart attacks and the 1995 harvest-time death of his winemaker, Matthew Dean Cox.

Humbled, he refocused on the wine business, becoming the first Oregon winery to start its own distribution company. Willamette Valley Vineyards wines, through its Bacchus Fine Wines distribution arm, now distributes in all 50 states and in eight foreign countries.

Other "firsts" followed: the first winery to use certified-sustainable cork in all its bottlings; the first to gain U.S. government approval to list on its label the amount of the "heart-healthy" antioxidant resveratrol in each bottle; being named agribusiness of the year in 2009; being one of the first wineries to gain certification from every group monitoring environmental and sustainability initiatives; and, just a few weeks ago, winning two "best of class" awards at the prestigious San Francisco Chronicle Wine Competition in Sonoma County.

Willamette Valley Vineyards is now Oregon's third-largest winery, selling more than 130,000 cases of wine annually. Its tasting room, overlooking I-5, is the most-visited facility in the state.

"I'm just a small-town Oregon guy who had the dream of building a world-class winery," Bernau said recently, raising his voice just enough to be heard as the bottling line behind him slapped label after label on the vaunted 2008 vintage. "I'm lucky enough to say that, every day, I am truly living that dream."

Motoya Nakamura/The Oregonian Newly labeled bottles of 2008 pinot noir await shipment at Willamette Valley Vineyards in Turner, just south of Salem. Founded by Jim Bernau in 1983 on a hilltop overlooking Interstate 5, the operation remains Oregon’s only publicly traded winery. Good timing -- and a leap of faith -- fulfill promise

When Jim Bernau pulled off the nation's first self-underwritten public
stock offering to found Willamette Valley Vineyards, timing was on his
side.

A decade later the calamitous accounting scandals of the late 1990s --
Enron, Tyco International, Adelphia -- prompted passage of 2002's
federal Sarbanes-Oxley Act. Had "SOX" been in effect earlier, Bernau
said, his effort would never have gotten off the ground.

"They would have turned me down," he said, referring to the lawyers and
accountants who provided critical help in crafting the offering. "The
threshold of compliance costs would have been too high for a young
start-up."

Even today, the law's requirement that public companies hire multiple
layers of accountants, hangs like a stone around the operation's
financial neck. Industry analysts estimate that the winery pays upward
of four times as much as its privately held counterparts for
accounting, auditing and an endless slew of mandatory reports.

"Our heads just spin that Willamette Valley Vineyards, a relatively
small public company in terms of capital, has to do this," said Jack
Irvine, whose Portland accounting firm specializes in winery clients.
"It's a travesty."

But even if he had the millions of dollars on hand to buy out his shareholders, Bernau says he wouldn't do it.

"Wine enthusiasts took a leap of faith to help me build a world-class
winery in Oregon," he said. "I made them a promise and will work hard
to keep it."